Trends in micro-markets: growth and future opportunities
Micro-markets are one of the most exciting innovations in the vending and unattended retail space. With sustained growth across Europe over the last five years and an impressive rebound after the COVID-19 pandemic, these self-service stores have a bright future ahead.
But what exactly is a micro-market? And what’s behind their sudden success?
In this post, we explore the main factors that have driven the recent rise of micro-markets - as well as what we can expect from the industry in the future. We’ll show you how we at CCV are shaping these trends, too.
What is a micro-market?
Somewhere between a vending machine and a full-sized café or store, a micro-market is a new self-service and self-checkout retail solution. Right now, they are most commonly used in closed environments - in offices or university spaces. However, across Europe, there are growing opportunities for micro-markets in public spaces too.
Here are some of the things that make micro-markets such an exciting prospect:
24/7 convenience. Imagine an unattended, 24-hour grocery store equipped with frictionless payment. That’s a micro-market. It allows round-the-clock customer convenience and choice, while assuring cost-efficiencies and boosting revenues for operators.
More choices. Conventional vending machines can only stock so many products - usually around 40. With micro-markets, operators have the opportunity to offer customers as much as ten times that number. For customers, that means greater choice; for operators, higher revenues.
Greater customer interaction. Unlike the vending machines of old, micro-markets aren’t sealed boxes with products kept out of reach. Rather, they let customers choose products, read their nutritional information, and pay - all by themselves. That way, the customer experience is improved - while operators keep staffing costs low.
Improved hygiene. In micro-markets, social interaction is kept to a minimum through self-service technologies. Post-COVID-19, this makes a huge difference in reassuring customers.
Easy remote management. Telemetry solutions allow data on micro-market stock, usage, maintenance issues, and hygiene to be accessed remotely. This makes the operator’s job easier, by reducing the need to manually check each site individually.
With their innovative, technology-led offerings, micro-markets promise to transform the unattended vending industry. In fact, the figures show they might already be doing just that.
Micro-markets: tracking the growth of an industry
So, what is the state of the micro-market industry? While micro-markets so far only account for 5% of the vending sector, data shows that this segment is growing fast.
39 % growth from 2018 to 2020
Recover the quickest
1,3 % compound annual growth rate
Between 2018 and 2020, the number of micro-markets grew by 39%. In the same period, the number of conventional vending machines fell by 21%. This makes micro-markets the fastest-growing segment in the vending industry.
COVID-19 has made the last two years difficult for many. But micro-markets suffered the lowest percentage loss among vending solutions in 2020 - and it is expected to recover the quickest. Analysts expect sales to match pre-pandemic levels by the end of 2021.
Overall, micro-markets are set to power a compound annual growth rate of 1.3% in the vending industry from 2020 to 2027.
What’s behind this dramatic growth?
Factors Driving Micro-Market Growth
- Greater demand for healthy snacks. Micro-markets are perfect for providing customers with healthier alternatives to products offered by conventional vending machines. Fresh and healthy snacks - as well as full, hand-prepared meals - aren’t best kept in a machine, particularly if customers want to see nutritional information or check dietary needs. From this demand, came a new solution.
- COVID-19. The pandemic and its lockdowns caused a dramatic change in the vending industry. But it hit the attended cafeteria segment even harder. With hygiene needs and social distancing meaning fewer staff are allowed on site, unattended, low-contact micro-markets have come into their own.
- Less cash use. We talk a lot about the move toward a cashless society at CCV. The convenience of frictionless cashless payment - through mobile payment, QR codes, or closed-loop systems - has helped make micro-markets more feasible and secure. This too has been accelerated by COVID-19.
Finally, new technology. Modern micro-markets simply wouldn’t be possible without new technologies. Advances in payment and security, for example, have allowed vendors to offer more convenient solutions for customers.
Meanwhile, new telemetry solutions have enabled operators to monitor micro-markets remotely. This development - powered by new back-end software that gives a real-time picture of the market - has truly changed the industry.
Upcoming trends in micro-markets
While micro-markets have developed dramatically in recent years, nothing suggests their growth will stop there. Here are three things we expect to see in the industry very soon:
New security features
One thing holding back micro-market adoption in public spaces is the issue of security. But with new solutions including payment card-based entry systems - and in some cases facial recognition - this obstacle to further growth may not be an obstacle for very long.
Value Added Services
We foresee vouchers, marketing opportunities, and loyalty features all being integrated into micro-market self-checkouts. That demands new technological solutions that can offer all of these services from the same device. CCV’s Android PoS, for example, will make this possible through the power of apps.
Easier and cheaper payment solutions
Future benefits won’t only benefit customers. Instead, we see technologies on the horizon that will allow remote operators to gain even deeper insights from their micro-markets - while ensuring set-up and operation costs are lower than ever.
It’s an incredibly exciting time for the micro-market industry - and at CCV we’re treading new ground. We can help lead your vending operations into the future. Get in touch to find out more and speak to one of our vending specialists.